Yesterday, the United States Court of Appeals for the Fourth Circuit (“Fourth Circuit” or “the court”) vacated a federal district court’s order requiring EPA to account for the economic impacts of Clean Air Act (“CAA”) regulations.  This decision stems from a suit filed by coal companies claiming that EPA had failed to perform a non-discretionary duty by completing continuous evaluations of job losses and plant closures resulting from CAA implementation or enforcement as required under Section 321 of the CAA.  In a strongly worded opinion, the district court ordered EPA to come into compliance with the requirements of Section 321 by July 2017, an order that EPA subsequently appealed to the Fourth Circuit.

In yesterday’s decision, the Fourth Circuit unanimously held that the district court did not have subject matter jurisdiction to resolve the coal companies’ claims brought under Section 304(a)(2) of the CAA, which authorizes suits to correct EPA’s failure to perform any non-discretionary duty under the CAA.  The scope of Section 304(c)(2) should be interpreted narrowly, reasoned the court, and limited to discrete actions that the agency is required to take.  The court found that Section 321(a) imposes on EPA a “broad, open-ended statutory mandate” to conduct economic evaluations on a continuing basis without “specifying guidelines” or “time-related instructions” to guide those evaluations.  Because Section 321 leaves much discretion to EPA, the court concluded that it does not impose on EPA “a specific and discrete duty” and is thus a “poor fit for judicial review.”  The Fourth Circuit vacated the district court’s order and remanded the case to the district court with instructions to dismiss it for lack of subject matter jurisdiction.

Although President Trump has generally been supportive of the coal industry, his administration maintained EPA’s defense against the suit.  If upheld, the district court’s decision may have opened the door for environmental groups to bring citizen suits alleging programmatic challenges to EPA’s broad statutory mandates.  In an e-mail statement issued to the press commenting on yesterday’s decision, however, EPA committed to consider economic and job impacts of proposed regulations regardless of the outcome of the case.

Preliminary indications suggest that the coal companies are likely to appeal yesterday’s decision.

For questions about yesterday’s decision, please contact Margaret Campbell, Mack McGuffey, Rich Pepper, or Andy Flavin.